The reason Costco's pizza is so cheap

Is the real reason why you have that Costco membership — despite the fact that you really have no need for gallon-sized jars of mayo or marinara or any of the other Costco mustn't-buys — your not-so-secret love for Costco's food court? Specifically, are you addicted to the super-delicious Costco food court pizza? If so, at least it's a pretty cheap addiction to have — one huge slice will set you back just two bucks, or you can take home an entire 18-inch 'za for under a sawbuck.

While you're probably not feeling any guilt over ripping Costco off for this steal of a deal, you may occasionally wonder just how they manage to keep their prices so low. Well, part of the reason is pretty simple — pizza's just not that pricey to produce. After all, Little Caesars sells pizzas even cheaper than Costco's, and they're not exactly going broke. Costco, however, has even more reason to persuade you into purchasing a low-priced pizza... sneaky merchandising psychology.

How Costco benefits from selling cheap pizza

Costco's pizza, like its famous $5 rotisserie chicken and $1.50 hot dog combo, is meant to drive foot traffic. Sure, you could swing by your local grocer, but if that craving for Costco pizza hits, why not combine dinner with shopping? That's not all that's going on — George Li, writing on Medium, speculates that the very placement of Costco's food court is carefully calculated to drive sales. It's located at the end, so you're going to get that slice of pizza as a reward after your shopping's done. Are you likely to buy more groceries on a full belly, or an empty stomach? The latter, of course. When you're hungry, everything looks good. In fact, you're more apt to purchase all kinds of stuff — not just food — if you shop while starving. And if the whole point in shopping at Costco, as opposed to anywhere else, is enjoying a tasty slice at the end — well, obviously you're not going to ruin your appetite by snacking before you shop.

Basically, long before you even get to that pizza, you've filled up your cart with all kinds of stuff that's maybe not going to make so much sense to you once you get it home — but that's okay, Costco knows you'll be back for more pizza. And more impulse buys. They could be practically giving away their pizza, and they'd still come out ahead. Very clever, Costco, very clever. Looks like you win again.